vineri, 9 noiembrie 2012

Mish's Global Economic Trend Analysis

Mish's Global Economic Trend Analysis

French Central Bank Says France Will Enter Recession 4th Quarter; Berlin Suggests Plan For France

Posted: 09 Nov 2012 06:49 PM PST

As expected, at least in this corner, things are going downhill rapidly in France.  The French central bank is now predicting recession for France.

Bear in mind Europe tends to use a pretty strict definition of recession - two consecutive quarters of negative GDP.

Courtesy of Google translate from El Economista, please consider France will enter recession in the fourth quarter, according to Bank of France.
The Bank of France expects the country into recession later this year, to predict a fall in Gross Domestic Product (GDP) of 0.1% in the fourth quarter, the same percentage that fell in the previous three months. If confirmed, it would be the first recession in the French economy since the 2009 crisis.

This is the first estimate of the situation issued by the Bank of France, which occurs a few days before you make the National Statistics Institute (INSEE), on November 15.

In its latest forecast, the INSEE predicted stagnation in the French economy in the last two quarters of the year and growth in the full year of 0.2%, one tenth less than what the government provides.

Production falls

In a note on circumstances, the Bank of France reported a further fall in industrial production in October, "mainly due to the continued decline in activity in the automotive sector."

In addition, the entity estimates that the backlog of French industry is still at an "insufficient" and that the forecast for November entrepreneurs scenarios are based on "slight reduction in activity."

In the area of ​​services, the Bank of France acknowledged that the activity also declined in October, although the picture is slightly less pessimistic than in the industrial production sector.

In its latest economic forecasts in May, Brussels expected gross domestic product (GDP) French creciese to 1.3% in 2013, estimates now revised downwards.

Any notion that France will grow 1.2% in 2013 is downright preposterous. The surprise, if any, is things are not much worse. They will be.

Here are a few articles to consider in case you missed them.

June 8, 2012: Hollande About to Wreck France With Economically Insane Proposal: "Make Layoffs So Expensive For Companies That It's Not Worth It"

July 16, 2012: Peugeot Has 51% Chance of Debt Default; Hollande Says France Will Not Let Peugeot Lay Off Workers

October 31, 2012: "Google Law" Yet Another Warped Policy by Hollande; Government Motors French Style

I am fairly certain I could find another dozen articles I have written about the inept policies of France dating back to January or last year, but it would be overkill.

Rest assured any downward revisions for France were not revised down enough.

Berlin to the Rescue

Also consider a Google translation from French site Les Echos which reports Berlin would consider a plan to put France back on the growth path
According to Reuters and Die Zeit, the German finance minister, Wolfgang Schäuble, has suggested the five "wise men" to study what could put France on the path of growth. President sages insane. The subject is extremely sensitive to Berlin, which makes Jean-Marc Ayrault Thursday.

"Le problème the most serious of the euro area at the moment is not Greece, Spain and Italy, but France, because it has really nothing to restore its competitiveness and is even in the process of go in the opposite direction Said one of the five wise Lars Feld. France needs reforms of the labor market, it is the country that works the least in the euro area ". Recently, the tabloid "Bild-Zeitung" was asked if France would not become "the new Greece ".
100% without a doubt Spain is too big to fail, and France dwarfs Spain.

Expect a eurozone breakup, and the sooner it happens the better.

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

ALS Raffle Winners Announced; Thanks For Your Support!

Posted: 09 Nov 2012 12:20 PM PST

I am pleased to announce the winners of the Les Turner raffle for the benefit of ALS research (Lou Gehrig's Disease).

For those of you who may be unaware, ALS took my wife on May 16, 2012. I wrote about it the next day in My Wife Joanne Has Passed Away; Stop and Smell the Lilacs.

I started a raffle for the benefit of ALS research. Raffle proceeds were split 50-50.

Still others made cash contributions. Money came in from forty countries around the globe.

The drawing was Wednesday. I was present at the drawing but did not personally draw names. I did make a phone call to all the winners. Some we did not reach until later. Most winners released the use of their names, a few did not.

Since this was an international affair, I was hoping for at least one winner outside the US. We did get one, from Unionville, Canada.

List of Winners

Place PrizeTicketWinner
1st$56,497.74 R1462Bill Zielinski from Oxford, CT
2nd$33,900.00 R0186Joe Rosson Bozeman, MT
3rd$16,950.00 R0995Andy Levy Unionville, Canada
4th$16,950.00 R0024John Lewis from Irving, TX
5th$16,950.00 R1513Eric S. New York, NY
6th$5,647.74 R1018Mark Vancil from Winnetka, IL
7th$5,647.74 R0897Ezra Long from Palmdale, CA
8th$5,647.74 R1190Middleville, NJ
9th$5,647.74 R0743Saul Fuentes from Houston, TX
10th$5,647.74 R0832David Stockman from Greenwich, CT

Stop and Smell the Lilacs

I want to thank all of you for your warm emails, shoulders to cry on, research contributions, and support via the raffle.

 

The raffle, including contributions, netted $261,122.68, all for ALS research.

On behalf of Joanne, and for those still on this planet, please remember to stop and smell the lilacs. Lilacs were her favorite flower.

Thanks to everyone for making this a huge success!

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com
Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.

"Saturation Point" for QE Nonsense; Fiscal Cliff Comparisons

Posted: 09 Nov 2012 09:21 AM PST

Via email, the chief economist for Saxo Bank in Denmark, Steen Jakobsen, discusses the "Saturation Point" for QE and the "Fiscal Cliff" in the US.

Steen writes ...

Fiscal Cliff Comparisons

  • A lot of people are starting to compare 2012 with 1987. Yes, it's scary.
  • Other people compare the fiscal cliff to 1937 Roosevelt where stock market tanked 50%.
  • Few people seems to realize that part of the "fiscal cliff" involved higher taxes on financial transactions, meaning it's prudent to take your profit and pay the tax in 2012.
  • Greece is doomed. A headline today read : Soros to invest substantial amount in Greece - He did the same in Russia in 1998 - just before they defaulted.
  • All EU solutions on the table: banking union regulation probably needs treaty changes - we are at the end of line.

Saturation Point for QE Nonsense Reached

  1. We are reaching "saturation points" for QE, Macro nonsense, politics, low interest rates, intervention in markets and the concept of extend-and-pretend.
  2. The laws of the market have been abandoned and replaced by "asset manipulation". We can discuss forever on the impact of QE, but everyone will and need to agree it distorts relative prices: It makes money cheaper and everything else expensive. QE also leads to subdued volatility between two equilibriums: The managed prices instituted by macro policy makers, and the real market price. The market then swings like a pendulum from "greed" to "fear" creating artificial volatility curves, [most often towards greed] which the market then misread as an indication of no trouble on the horizon. Meanwhile back in Reality-City the systemic risk is massive and expanding.
  3. We have paradigm shift in energy which will provide positive input to growth and reshoring of jobs to US and Europe.
  4. QE stopped having an impact on the [real] economy two years ago. Now we have reached the saturation point of QE on assets. Sure FED will print another 1 trillion, but the trend and talk even among policy makers (notably the Bank of England) is that QE impact is now limited after three year of zero interest rates.
  5. A crisis creates the foundation for a mandate for change.
  6. Social tension is rising everywhere.
  7. The EU does not work. Either they go to mini-max: Fiscal compact and the already [in place] supervision or they risk a treaty change which will take years and tear Europe apart. Greece will leave EURO inside next six month, but in a "managed fashion".
  8. Merkel's re-election means she needs to be more EU skeptical to create opposition for the all in SPD.
  9. A new one: Africa is the future. In 2013 investing in Africa post Q1 turmoil could be "safest bet" as Foreign Direct Investment is increasing (China has committed to in excess of 20 billion US Dollars over three years). The GDP's are so small that "any" positive change will create exponential growth. The GDP of South Africa is 400 billion USD, slightly bigger than Denmark's 330 billion US Dollars, but with 45 million more people and resource en masse.

Conclusion

We will have volatile end to the year with people looking to take profit for tax reason in the US - combined with a best compromise on the fiscal cliff likely to be a drag on growth by 1.5% (- 150 S&P points).

The manipulation will continue for rest of 2012, but if we are right about the "saturation point" above then we are in for a big dose of reality which will have to be used to reset our portfolio towards upside - rather than downside - as the micro-economy is better than ever and the macro policies are bloated to such an extent it is difficult to continue.

Steen
Mish Thoughts and Notes

I cleaned up a few typos and added a couple of subtitles in bold and a few clarifications in braces.

I am in general agreement with at least 90% of what Steen wrote while noting that I had not thought much about Africa until now.

I too suspect we will see some sort of Fiscal Cliff compromise, without making my own guess as to size. Steen's guess of 1.5% seems as good a guess as any, and it will tip the US into recession (assuming the US is not in recession now, which I still think it is).

I also expect QE is at the end of the line, and it never did anything for the "real" economy, ever. If QE has less effect on the "unreal" economy (asset manipulation and financials), then the downside will likely be greater than what Steen thinks. 

The macro picture: demographics, China, Europe, student debt, part-time employment, under-funded pension plans, etc., is bleak.

My primary disagreement with Steen is on the "micro-economy". I suggest it only looks good because of distortions caused by fiscal and monetary stimulus.

Thanks Steen!

Mike "Mish" Shedlock
http://globaleconomicanalysis.blogspot.com

"Wine Country" Economic Conference Hosted By Mish
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Mike "Mish" Shedlock is a registered investment advisor representative for SitkaPacific Capital Management. Sitka Pacific is an asset management firm whose goal is strong performance and low volatility, regardless of market direction. Visit http://www.sitkapacific.com/account_management.html to learn more about wealth management and capital preservation strategies of Sitka Pacific.
Publicat de 1 la 23:51 0 comentarii

Damn Cool Pics

Damn Cool Pics

From Fatty To Hottie

Posted: 09 Nov 2012 03:09 PM PST

Never give up if you want to lose extra weight. It is possible only if you really desire to bring changes to your life. All these girls have proved that stunning body transformations can become the reality once you make efforts to stay fit and healthy. Check out these incredible before and after pictures of girls who have successfully lost a significant amount of weight.




































































Epic Fails - Part 19

Posted: 09 Nov 2012 12:50 PM PST

Choose the Best Dog Food [Infographic]

Posted: 09 Nov 2012 11:02 AM PST

As you may have heard, there has been a lot of discussion surrounding the latest dog food recalls. Many dog owners are unaware of what to look for when choosing the proper dog food. Due to the recent controversy, Havahart Wireless has chosen to create an infographic educating dog owners on the best methods of selecting a healthy dog food. This infographic includes statistics on the latest problems with dog food, how to read a dog food label, what ingredients to look for and avoid, etc.

 Click on Image to Enlarge. Choose the Right Dog Food Infographic Via havahartwireless

Disney Princesses Welcome Princess Leia From Star Wars

Posted: 08 Nov 2012 08:02 PM PST


Snow White, Ariel, Belle, Cinderella and Aurora teach Princess Leia what it means to be a Disney Princess.

Dorms in China

Posted: 08 Nov 2012 07:47 PM PST

Look at these pics showing the living conditions of the average Chinese people. Isn't it just awful?
Publicat de 1 la 19:14 0 comentarii
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